{"id":429,"date":"2020-08-18T09:24:43","date_gmt":"2020-08-18T17:24:43","guid":{"rendered":"https:\/\/wiroweklaw.com\/?p=429"},"modified":"2020-10-28T15:54:17","modified_gmt":"2020-10-28T15:54:17","slug":"429","status":"publish","type":"post","link":"https:\/\/wiroweklaw.com\/429\/","title":{"rendered":"Many people cannot help wondering about a future inheritance"},"content":{"rendered":"<p>Although it is rare for anyone to look forward to the passing of a loved one, many people cannot help wondering about a future inheritance. Often when a person dies and leaves money or property to heirs or beneficiaries, the first thing the heirs or beneficiaries want to know is the overall value of the estate. If the executor or the trustee (the person or entity in charge of handling the final affairs of a deceased person) shares that information, as is typically required, it can be tempting for heirs or beneficiaries to immediately do some quick mental math to estimate how much they will receive. With that number in mind, they may begin mentally spending the anticipated inheritance on things that have always been a little out of reach.<\/p>\n<p>Allowing an heir or beneficiary to mentally spend an inheritance before receipt can be dangerous. An estate may have to settle a number of expenses, detailed further below, that can cause the amount an heir or beneficiary ultimately receives to differ significantly from what was expected.<\/p>\n<ul>\n<li><strong>Creditor Claims. <\/strong>The executor or trustee has a duty to determine whether the deceased owed anyone money. This often requires a thorough search of the deceased\u2019s financial records and contacting the deceased\u2019s creditors to identify any outstanding balances. Creditors may include banks that hold a mortgage on real property, business partners, credit card companies, hospitals, and medical providers, among others. Additionally, it is usually a good practice for the executor or trustee to give notice in an appropriate newspaper or legal publication to notify unknown creditors that they must present any claims within a certain amount of time or they will be forever barred from bringing them in the future. Once creditor claims are presented, the executor or trustee must determine which claims are valid and pay them. In some cases, the executor or trustee may need to challenge and even litigate certain claims in court. In that case, the litigation costs may exceed the amount of the claim, which will impact the amount ultimately distributed to the heirs or beneficiaries.<\/li>\n<\/ul>\n<p style=\"margin-left: 40px;\">Depending on the number of creditors and the amounts owed, an estate may run out of money during the course of administration, leaving nothing to the heirs of the estate or beneficiaries of the trust.<\/p>\n<ul>\n<li><strong>Estate Expenses.\u00a0 <\/strong>In addition to creditor claims, an estate must often pay administration expenses. Listed below are the most common estate expenses:\n<ul>\n<li>burial and funeral expenses<\/li>\n<li>tax preparation fees<\/li>\n<li>property appraisal fees<\/li>\n<li>expenses related to storing and shipping personal property to heirs or beneficiaries<\/li>\n<li>expenses related to home repairs and improvements to prepare real property for sale<\/li>\n<li>maintenance costs for real and personal property during administration of the estate or trust<\/li>\n<li>attorney fees<\/li>\n<li>trustee or executor fees<\/li>\n<li>probate court fees<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"margin-left: .5in;\">Depending upon the size of the estate and the nature of the accounts and property held by the estate, these expenses may make a significant dent in the final amount available for heirs or beneficiaries.<\/p>\n<p style=\"margin-left: .5in;\">Some of the fees listed above can be reduced or even eliminated with good planning during the deceased\u2019s lifetime. For example, using a fully funded revocable living trust as the deceased\u2019s primary estate planning tool usually avoids the need for probate of an estate. A trust may therefore reduce attorney fees and court costs significantly. Nevertheless, professionals such as attorneys and property appraisers may still be needed even if not dealing with probate. In many cases, however, their involvement can be significantly reduced by avoiding probate.<\/p>\n<ul>\n<li><strong>Litigation Expenses.<\/strong> Controversy between family members is one of the most financially disastrous things that can impact the amount of money and property ultimately available for distribution to heirs or beneficiaries. When such disagreements cannot be resolved through mediation or negotiation, the gloves come off, and family members lawyer up and settle in for a long, drawn-out court battle. In such cases, the attorney fees alone can spiral into the tens and even hundreds of thousands of dollars. The terms of the estate planning document often authorize the trustee or the executor to use the estate or trust property to pay for a defense against attacks by the heirs or beneficiaries. When this happens, even heirs or beneficiaries not involved in a challenge or contest can end up with far less than they might have expected.<\/li>\n<\/ul>\n<p>There are several ways to maximize the amount of money and property ultimately available for your heirs or beneficiaries:<\/p>\n<ul>\n<li>Carry enough life insurance so that your trustee or executor has sufficient cash to quickly pay off any creditor claims at your death.<\/li>\n<li>Use nonprobate methods for distributing your assets such as trusts and, when appropriate, beneficiary designations.<\/li>\n<li>Either alone or with the help of your attorney, write out a clear set of instructions to those who will be in charge of your final affairs so that they know exactly who your creditors are, which estate documents are the most recent, and who they should contact upon your passing.<\/li>\n<li>Talk to your loved ones beforehand to make sure they know what to expect when you die and what your expectations are of them.<\/li>\n<li>Work to resolve disputes between loved ones while you are still alive rather than leaving things to chance during the winding down of your affairs and administration of your estate or trust.<\/li>\n<li>Clearly specify in your legal documents who will get what so that it is crystal clear to everyone.<\/li>\n<li>Consider making funeral arrangements and purchasing a prepaid funeral plan before you die.<\/li>\n<li>Work closely with your attorney to make sure your trust is funded properly and that your other estate planning documents are up to date and clearly reflect your wishes.<\/li>\n<\/ul>\n<p>The effort that you put into planning your estate today can have a significant impact on how much of your money and property end up in the hands of your heirs or beneficiaries. Still, it is important to properly set expectations for your beneficiaries. Not all expenses can be avoided, and loved ones need to understand that mentally spending money that they may never receive can be, at best disappointing, and at worst, financially disastrous. We are here to assist you and your family as you have discussions about the expenses of probate or trust administration and proposed inheritances. If you have any questions or would like us to help facilitate this conversation, please give us a call.\u00a0 We are available for in-person and virtual appointments.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Although it is rare for anyone to look forward to the passing of a loved one, many people cannot help wondering about a future inheritance. Often when a person dies and leaves money or property to heirs or beneficiaries, the first thing the heirs or beneficiaries want to know is the overall value of the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Many people cannot help wondering about a future inheritance - Wirowek Law Group PC<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/wiroweklaw.com\/429\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Many people cannot help wondering about a future inheritance - Wirowek Law Group PC\" \/>\n<meta property=\"og:description\" content=\"Although it is rare for anyone to look forward to the passing of a loved one, many people cannot help wondering about a future inheritance. 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